Broker demanded $20 commission for rent-stabilized apartment

Now brokerage commissions in New York are damn high. A real estate agent recently charged an eye-popping fee of nearly $20.000 for a cheap Upper West Side apartment, reports New York Post.

The one-bedroom apartment was originally listed for $3 per month on StreetEasy. But the agent told potential tenants it was on the list of rent-stabilized units and would only cost them $750 ​​a month.

This is well below the average rent in Manhattan, which hit a record $4 per month in July. And any future apartment rent increase will be limited by the city's rent management board. This year he has approved a 150% increase if the lease is signed for one year.

Then the agent, Ari Wilford of City Wide Apartments in Manhattan, revealed a shocking detail: the broker's commission would be $20.000.

"He said, 'Given the rent, the broker's commission would be completely worth it in the long run.' And yes, he’s right, but it’s still a lot of money for a commission broker,” said the tenant, who wished to keep his identity secret.

The tenant said he was able to get Wilford to cut the commission by $500, after which they signed a lease.

The apartment is located in a 6-storey pre-war building with an elevator, located near the Central Park.

On the subject: The tenant of a luxury apartment in New York threw eggs at the neighbors' doors: she was sued

Finding an apartment in New York has become grueling, with tenants standing in long lines to get tiny spaces. And some properties even break out bidding wars.

But a $20.000 brokerage commission is unusual even in today's hot market.

A typical fee to a broker is usually one month's rent, or a maximum of 15% of the annual rent.

“I have never seen such a thing. All my brokerage fees were 15% of the annual rent,” said realtor Marvin Michel.

Broker Dolly Lenz said that if the tenant complained loudly enough, they could probably get their money back.

Another City Wide Apartments agent also asked for a sky-high commission for an Upper East Side apartment in June. She, too, was rent-stabilized at $2250 a month. But the potential tenant refused to pay the claimed $10 commission. The further fate of this apartment is unknown.

There are no restrictions

The state department that issues licenses to real estate agents said there is no law that sets a limit on a broker's commission.

“However, the broker's commission should represent a fee for actual services. Realtor license holders are required to act with integrity. They cannot charge exorbitant commissions that are not reasonably related to the work they have done,” said spokeswoman Mercedes Padilla.

She added that the department takes the behavior of licensees seriously. And investigates complaints filed on a case-by-case basis.

Wilford declined to comment. His boss, Michael Jacobs, did not respond to a request for comment.